Apple will have to pay $368 million in damages to VirnetX.

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A $368.2 million verdict against Apple has been upheld in the Eastern District of Texas, putting patent holding company VirnetX in a position to collect both royalties and damages from Apple if it continues to use its VPN and FaceTime technologies. Judge Leonard Davis ruled late Tuesday on Apple's request for either a reduction in the damages or a new trial, denying both requests and ordering the two companies to work out a licensing deal on VirnetX's patents.

The lawsuit began in 2010 when VirnetX filed suit against Apple, Cisco, and other companies over their respective VPN implementations (which included Apple's FaceTime tech in iOS and OS X). The suit waddled through the court system for more than two years until VirnetX won its $368.2 million judgment against Apple in late 2012. The firm then tried to ask the court for an injunction stopping Apple from continuing to use the technology.

The similar lawsuits against Cisco, et al are still ongoing and trials have been rescheduled for next month. VirnetX also secured a 2010 settlement from Microsoft over the same patents.

The court denied VirnetX's request for an injunction but upheld the damages as part of Wednesday's ruling, saying there was "substantial evidence" to support the damages. Judge Davis also ordered Apple to pay $330,211 per day (hat tip Seeking Alpha) to VirnetX until the royalty payments are sorted out between the two companies. They have 45 days to do so before the court makes another ruling.

As pointed out by our Tech Policy Editor Joe Mullin, the situation VirnetX has found itself in is practically a patent-holder's dream. Not only will the company receive millions in damages from Apple, it will also likely win ongoing royalties. This is almost as desirable a situation as if VirnetX had simply won an injunction—if VirnetX wins just one percent of royalties on the sale of iOS devices, it could make a ton of money. In fact, one percent isn't outside the realm of possibility—before Newegg was able to defeat Soverain Software's patents for the online "shopping cart," Soverain stood to rake in a one percent royalty payment from Avon and Victoria's Secret online sales thanks to the same federal court in the Eastern District of Texas.

Apple has not responded to our request for comment by publication time, but needless to say, VirnetX is happy with the decision. "We are extremely pleased with the Court's Order in our suit against Apple," VirnetX CEO Kendall Larsen said in a statement. "We look forward to negotiating a license with Apple that includes an ongoing royalty agreement."

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Jacqui Cheng
Jacqui is an Editor at Large at Ars Technica, where she has spent the last eight years writing about Apple culture, gadgets, social networking, privacy, and more. Emailjacqui@arstechnica.com//Twitter@eJacqui